Latest US Goverment Accountability Office Report confirms: software is problem number one. Affordability problem two.
Continued software problems could lead to further delivery delays of less-capable, less-reliable aircraft at a long-term pricelevel and with long-term operating and support costs that may prove unaffordable.

US GAO report too optimistic

The US GAO conclusions and suggestions on software- and mission system tests and outcomes are too optimistic. The complexity of the software is huge and further delays of Initial Operational Capability seem to be unavoidable. Also their statements on long-term affordability don’t balance te fact that US DoD has never predicted the right cost of any F-35A, F-35B or F-35C the previous budget cycles since 2010. Every budget year it comes up different (and higher as predicted one year before). Only one budget year ahead their predictions are quite right.

Not much attention for high cost of modifications

This year US GAO report has a focus on software problems, but a long series of other technical problems has to be solved.
An other fact that is nearly missing in this latest US GAO report is the budget reservation of an unprecedented US$ 1.4 billion over five years (FY2015-2019), with much more to come, to repair deficient parts at early production aircraft and bring them up to a more capable software block.
The most extensive jump between blocks, from 2B to 3i, involves:
- Installation of new radar
- Installation of integrated core processor
- Newer electronic warfare modules.
In the US GAO report is also missing the complete list of over 150 priority issues, well known within the JSF Program Office. On this list we may find:
- lightning protection
- power and thermal management system
- update air ducts on the Pratt & Whitney-produced engine
- ejection seat
- wing tip lighting and taxi system lighting
- weapon bay lights
- upgrades of bulkheads due to durability issues
- replacing the current complicated helmet-mounted display system by a newer version.
Other necessary modifications:
- IPP - integrated power package
- Life support system
- Communication equipment
- OBOGS - on-board oxygen-generation system
- Several other less important items.

This will bring high cost for (operational) testing and modification. The F-35 system still has a long way to go.

Here follows some contents of the US GAO Report, tekst copied from the report:

Conclusions

Since the F-35 program restructuring was completed in March 2012, acquisition cost and schedule estimates have remained relatively stable, and the program has made progress in key areas. However, persistent software problems have slowed progress in mission systems flight testing, which is critical to delivering the warfighting capabilities expected by the military services. These persistent delays put the program’s development cost and schedule at risk.

As a result, DOT&E now projects that the warfighting capabilities expected by the Marine Corps in July 2015, will not likely be delivered on time, and could be (extra) delayed as much as 13 months. This means that the Marine Corps may initially receive less capable aircraft than it expects, and if progress in mission systems software testing continues to be slower than planned, Air Force and Navy initial operational capabilities may also be affected. The program may also have to extend its overall developmental flight test schedule, which would increase concurrency between testing and production and could result in additional development cost growth.

In addition to software concerns, the current funding plans may be unaffordable, given current budget constraints. This situation could worsen if unit cost targets are not met. Finally, the estimated cost of operating and supporting the fleet over its life-cycle continues to be high and could increase further if aircraft reliability goals are not met.

DOD has already made a number of difficult decisions to put the F-35 on a more sound footing. More such decisions may lie ahead. For example, if software testing continues to be delayed, if funding falls short of expectations, or if unit cost targets cannot be met, DOD may have to make decisions about whether to proceed with production as planned with less capable aircraft or to alter the production rate.

Also, if reliability falls short of goals, DOD may have to make decisions about other ways to reduce sustainment costs, such as reduced flying hours. Eventually, DOD will have to make contingency plans for these and other issues. At this point, we believe the most pressing issue is the effect software testing delays are likely to have on the capabilities of the initial operational aircraft that each military service will receive. In order to make informed decisions about weapon system investments and future force structure, it is important that Congress and the services have a clear understanding of the capabilities that the initial operational F-35 aircraft will possess.

Recommendation of US GAO

Due to the uncertainty surrounding the delivery of F-35 software capabilities, we recommend that the Secretary of Defense conduct an assessment of the specific capabilities that realistically can be delivered and those that will not likely be delivered to each of the services by their established initial operational capability dates. The results of this assessment should be shared with Congress and the military services as soon as possible but no later than July 2015.

Testing of Critical Software Poses a Significant Challenge

Delays in the testing of critical mission systems software have put the delivery of expected warfighting capabilities to the Marine Corps at risk, and could affect the delivery of capabilities to the Air Force and Navy as well. F-35 developmental flight testing is separated into two key areas: mission systems and flight sciences. Mission systems testing is done to verify that the software and systems that provide critical warfighting capabilities function properly and meet requirements, while flight science testing is done to verify the aircraft’s basic flying capabilities. In a March 2013 report we found that development and testing of mission systems software was behind schedule, due largely to delayed software deliveries, limited capability in the software when delivered, and the need to fix problems and retest multiple software versions. These same challenges continued thorough 2013, and as a result progress in mission systems testing has been limited. The Director of Operational Test and Evaluation (DOT&E) predicts that the delivery of expected warfighting capabilities to the Marine Corps could be delayed by as much as 13 months. Delays of this magnitude could also increase the already significant concurrency between testing and aircraft procurement and result in additional cost growth. Although mission systems testing is behind, the F-35 program has been able to accomplish nearly all of its planned flight science testing. The program also continued to make progress in addressing key technical risks, although some of that progress has been limited.

While the F-35 program was able to accomplish all of the mission system test flights it had planned in 2013, it did not accomplish all of the planned test points, Developmental testing of Block 2B software is behind schedule and will likely delay the delivery of expected warfighting capabilities. The delivery of this software capability is of high near-term importance because it provides initial warfighting capability for the overall F-35 program, and is needed by the Marine Corps to field its initial operational capability in July 2015. As of January 2014, the program planned to have verified the functionality of 27 percent of the software’s capability on-board the falling short by 11 percent. The F-35 program planned to fly 329 mission systems test flights and accomplish 2,817 test points in 2013. The program actually flew 352 test flights, exceeding the goal, but only accomplished 2,518 test points. According to program and contractor officials, slow progress in developing, delivering, and testing mission systems software continues to be the program’s most significant risk area.

Further Delay of DOT & E testing

Developmental testing of Block 2B software is behind schedule and will likely delay the delivery of expected warfighting capabilities.
As of January 2014, the program planned to have verified the functionality of 27 percent of the software’s capability on-board the aircraft, but had only been able to verify 13 percent. This leaves a significant amount of work to be done before October 2014, which is when the program expects to complete developmental flight testing of this software block. According to DOT&E, Block 2B developmental testing will not be completed as scheduled and could be delayed by as much as 13 months, as the program has had to devote time and resources to address problems and completing development of prior software blocks.

Higher Development Costs

Delays in mission systems software testing could also increase costs. As currently planned, DOD expects to complete developmental flight testing in 2017. If the flight test schedule is extended, the program may have to retain testing and engineering personnel longer than currently expected, which would increase development cost.

Program Funding Projections and Unit Cost Targets May Not Be Achievable

The F-35 program’s high projected annual acquisition funding levels continue to put the program’s long-term affordability at risk. Currently the acquisition program requires $12.6 billion per year through 2037, which does not appear to be achievable given the current fiscal environment. The program is reducing unit costs to meet targets, but a significant amount of additional cost reduction is needed if it expects to meet those targets before the beginning of full rate production—currently scheduled for 2019. Additionally, the most recent life-cycle sustainment cost estimate for the F-35 fleet is more than $1 trillion, which DOD officials have deemed unaffordable. The program’s long term sustainment estimates reflect assumptions about key cost drivers that the program does not control, including fuel costs, labor costs, and inflation rates. The program is also focusing on product reliability, which is something that the program can control, and something we have found in our prior best practices work to be a key to driving down sustainment costs. According to program reliability data, each F-35 variant was tracking closely to its reliability plan as of December 2013, although the program has a long way to go to achieve its reliability goals.

The overall affordability of the F-35 acquisition program remains a significant concern. As of March 2013, the program office estimated that the total acquisition cost will be $390.4 billion. At $12.6 billion a year, the F-35 acquisition program alone would consume around one-quarter of all of DOD’s annual major defense acquisition funding. Therefore, any change in F-35 funding is likely to affect DOD’s ability to fully fund its other major acquisition programs. In addition, maintaining this level of sustained funding will be difficult in a period of declining or flat defense budgets and competition with other large acquisition programs such as the KC-46 tanker and a new bomber. These costs do not include the costs to operate and maintain the F-35s as they are produced and fielded.

F-35 low reliability major concern

As the program faces key decisions about its F-35 operation and support strategy reliability is still a significant concern. Our past work has found that weapon system operating and support costs are directly correlated to weapon system reliability, which is something the program can affect.
DOT&E’s recent report noted concerns about the program’s ability to achieve its reliability goals by the time each of the F-35 variants reaches maturity—defined as 75,000 flight hours for the CTOL and STOVL variants; and 50,000 flight hours for the CV. DOT&E also noted that the F-35 design is becoming more stable, and although the program still has a large number of flight hours to go until system maturity, additional reliability growth is not likely to occur without a focused, aggressive and well-resourced effort.

Program Manufacturing Processes Continue to Show Improvement

F-35 manufacturing has improved and the contractor’s management of its suppliers is evolving. As the number of aircraft in production has increased, learning has taken place and manufacturing efficiency has improved.
The prime contractor continues to gain efficiencies in the manufacturing process as it learns more about manufacturing the aircraft. Reductions in the amount of time spent on work completed out of its specific work station have contributed to overall labor hour reductions.
As manufacturing efficiency has improved, the prime contractor has also been able to increase throughput, delivering more aircraft year over year—9 in 2011, 30 in 2012, and 35 in 2013. Over the past year, the prime contractor continued to deliver aircraft closer to contracted delivery dates. Last year we found that deliveries averaged 11 months late.